During February, the Invesco Solar ETF experienced a pullback largely attributed to overall market conditions, as well as sector specific developments such as (1) European developers calling on the EU to develop its solar supply chain strategy; (2) higher demand for polysilicon; and (3) expected friction in the US utility-scale solar segment due to the latest anti-circumvention case.
Major EU solar developers have signed a letter to the European Commission calling on the EU to develop its own solar supply chain strategy to avoid cost increases and disruption to projects. The signatories include BayWa r.e., EDF Renewables, Enel Green Power, ENGIE, Iberdrola Renewables, Amarenco, Akuo Energy, and Vattenfall Solar. The EC currently expects 479GW of solar to be installed by 2030, while solar developers believe the EU will need to install 870GW by 2030 to meet climate targets.
Polysilicon prices have been up 0.7% since Jan. 26, 2022, and CSI expects pricing to continue on an upward trend through the beginning of March. Tier 1 wafer manufacturers in China plan to continue increasing their operating rates while bringing new production capacity online at a steady pace. In February, the output of polysilicon is expected to increase by 2000 MT. Downstream demand is expected to be strong as domestic projects start installations in China.
Filed on Feb. 11, 2022, the latest anti-circumvention case serves as yet another source of friction for the US utility-scale solar segment. Our checks subsequent to the Auxin filing suggest there is a high probability that the Department of Commerce (DOC) will take the case on. Trade lawyers remind us that the last anti-circumvention case, which was dismissed, “never displayed any doubt about the substance of the complaint.” Moreover, if there were doubts, the “instinct” of the DOC would be to build an evidentiary record and gather facts to investigate.
By Jesse Pichel
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